Business Briefs

Stocks fall sharply on weak GDP data

NEW YORK — Stocks sank Thursday after weak readings on economic growth, and the job market renewed concerns about the financial health of businesses and consumers.

The Commerce Department's report that gross domestic product grew at a 1.9 percent pace in the second quarter disappointed investors, who were concerned about a Labor Department report showing the number of people seeking unemployment insurance benefits jumped to the highest level in five years.

The Dow Jones industrial average fell 205.67, or 1.78 percent, to 11,378.02. The S&P 500 lost 16.88, or 1.31 percent, to 1,267.38. The Nasdaq composite index fell 4.17, or 0.18 percent, to 2,325.55.

Merrill Lynch hit with fraud claim

BOSTON — Massachusetts security regulators accused Merrill Lynch of fraud Thursday for allegedly promoting the sale of auction-rate securities when they knew the investments were becoming increasingly unstable.

The administrative complaint filed by Secretary of State William Galvin claims Merrill Lynch, Pierce, Fenner & Smith, the main subsidiary of Merrill Lynch & Co., aggressively sold the securities while downplaying the risks. Merrill Lynch denied the charges.

$4.5 billion bid for ImClone Systems

TRENTON, N.J. — Bristol-Myers Squibb Co. on Thursday offered $4.5 billion in cash for biotechnology company ImClone Systems Inc., saying the two are "a natural fit." In a statement, ImClone said it is "currently studying the situation."

The proposal offers ImClone stockholders $60 per share, a 30 percent premium on its closing price of $46.44 Wednesday. Bristol-Myers already owns about 17 percent of ImClone.

The two companies have been partners since September 2001 in developing Erbitux, which is approved for treating advanced colorectal cancer and head and neck cancers.

Paper maker posts higher earnings

MEMPHIS, Tenn. — International Paper Co. said Thursday that its second-quarter profit jumped 20 percent, beating Wall Street's estimates, as strong international sales helped offset rising raw material costs.

The company said it earned $227 million, or 54 cents per share, compared with $190 million, or 44 cents per share, a year earlier. Excluding one-time items, the company said it earned $235 million, or 56 cents per share, compared with $223 million, or 52 cents per share, in the second quarter of last year.